LECT 3 - Political %26 Legal Environments %2B MIS %2B Marketing Research

8/8/2019 LECT 3 - Political %26 Legal Environments %2B MIS %2B Marketing Research

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Global Marketing

Political & Legal Environments +

shaping success in business and finance

Marketing Research

Week 3

David Shaw


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Chapter 5

The Political Le al and

Regulatory Environments of GlobalMarketing


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Introduction

The global marketer must attempt tocomply with each nations laws and

regulations with respect to the cross-

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border movement of services,people, money, and know-how. Laws

and regulations that change

frequently or are ambiguous canhamper the companys activities.


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The Political Environment

Made up of governmental institutions,

political parties, and organizations thatrulers and people use to wield power

Each nations political culture reflects the


importance of the government and legalsystem.

Issues for foreign investors include the

governing partys view on sovereignty,political risk, taxes, equity dilution, andexpropriation.


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Nation-States and Sovereignty

Every sovereign state is bound to respect

the independence of every other


sovereign state, and the courts in onecountry will not sit in judgment on the

acts of government of another done

within its territory.U.S. Supreme Court Justice

Fuller


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Political Risk

Risk of change in

political environment or

government policy that

would adversely affect


a companys ability tooperate effectively and

profitably

When perceived political risk is high, a country will havea difficult time attracting foreign direct investment


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Political Risk

Some examples of political risk include

War Social unrest

Politically motivated violence


Social conditions (population density and wealthdistribution)

Corruption, nepotism

Crime Labor costs

Tax discrimination


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Taxes

Government taxation policies


growth and cross-border shopping

Corporate taxation

Companies attempt to limit tax liabilityby shifting location of income


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Seizure of Assets

Expropriationgovernmental actionto dispossess a foreign company orinvestor


Compensation should be providedin a prompt, effective, andadequate manner

Confiscation occurs when nocompensation is provided


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Seizure of Assets

Nationalizationa government

takes control of some or all of the


enterprises in an entire industry Acceptable according to international

law if

Satisfies public purpose

Includes compensation


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Seizure of Assets

Creeping expropriationlimits economic

activities of foreign firms May include Limits on repatriation of profits, dividends, or royalties


Increased local content laws Quotas for hiring local nationals

Price controls

Discriminatory tariff and nontariff barriers Discriminatory laws on patents and trademarks


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International Law

The rules and principles that nation-states consider binding among

themselves


Disputes between nations are issuesof public international law

World Court or International Court ofJustice (ICJ)

Judicial arm of the United Nations


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Common Law vs. Civil Law

The Napoleonic Codeof 1804 drew on the

Roman legal system


an s e as s or

continental European

law today. Code law is

also known as civil law.

U.S. law is rooted inEnglish common law.


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Common Law versus Civil Law

Common lawcountry

Disputes are decided by

Civil law country Legal system reflects

the structural concepts


of past judicial decisions Companies are legally

incorporated by stateauthority

Code law is used in fewareas; the U.S. UniformCommercial Code

and principles of theRoman Empire

Companies are formed

by contract between

two or more partieswho are fully liable for

the actions of the

company


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Sidestepping Legal Issues

Get expert legalhelp


Establish jurisdiction

Protect intellectual

property

Avoid bribery


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Jurisdiction

Refers to a courts authority to rule onparticular types of issues arising outside ofa nations borders or to exercise power

over individuals or entities from differentcountries

Employees of foreign companies should


understand the extent to which they aresubject to jurisdiction of host-countrycourts

Courts have jurisdiction if it can bedemonstrated that the company is doingbusiness in the state the court sits


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Intellectual Property

Intellectual property must be registered ineach country where business is conducted

Patentgives an inventor exclusive right to


, ,

period of time

Trademarkdistinctive mark, motto, device, or

emblem used to distinguish it from competing

products Copyrightestablishes ownership of a written,

recorded, performed, or filmed creative work


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Infringement of IntellectualProperty Counterfeitingunauthorized

copying and production of a product

Associative counterfeit/imitation


pro uct name ers s g t y rom awell-known brand

Piracyunauthorized publication or

reproduction of copyrighted work


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Intellectual Property



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Protecting Intellectual Property

In the United States, registration iswith the Federal Patent Office


,

European Patent Office or register

country by country

Soon the Community PatentConvention will cover 25 countries


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World Intellectual Property

Or anization


Governed by the Madrid Agreementand the Madrid Protocol

Allows trademark owners to seek

protection in as many as 74 countries

with a single application and fee


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International Convention for the Protectionof Industrial Property

Paris Convention


Facilitates multi-country patent registration,ensures that once a company files, it has aright of priority in other countries for 1 yearfrom that date

Patent Cooperation Treaty

European Patent Convention


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U.S. Companies Receiving the Most Patents,2005

Company # of Patents

1. IBM 2,941

2. Hitachi 1,918

3. Canon Kabushiki Kaisha 1,875

4. Matsushita Electric Industrial 1 813


5. Hewlett-Packard 1,8086. Samsung Electronics 1,641

7. Micron Technology 1,561

8. Intel 1,5499. Siemems 1,345

10. Toshiba 1,338


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Antitrust

Laws are designed to combat restrictive businesspractices and to encourage competition.

Enforced by FTC in the United States, Fair TradeCommission in Japan, European Commission in


The Sherman Act of 1890 prohibits certainrestrictive business practices including fixingprices, limiting production, allocating markets, orany other scheme designed to limit or avoid

competition. Law applies to U.S. companiesoutside U.S. borders and to foreign companiesoperating in the United States.


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Licensing and Trade Secrets Licensing is a contractual agreement in

which a licensor allows a licensee to usepatents, trademarks, trade secrets,technology, and other intangible assets in


return or roya ty payments or ot er ormsof compensation.

Important considerations What assets may be licensed

How to price assets

The rights granted


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Licensing and Trade Secrets

Trade secrets are confidential information or

knowledge that has commercial value and isnot in the public domain and for which stepshave been taken to keep it secret


To prevent disclosure, use confidentialitycontracts

The Uniform Trade Secrets Act has beenadopted by most U.S. states

TRIPS, Trade-Related Aspects of IntellectualProperty Rights signed by members of GATT


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Bribery and Corruption Foreign Corrupt Practices Act

Requires publicly held companies to institute

internal accounting controls that would record alltransactions

Makes it a crime for a U.S. corporation to bribe anofficial of a forei n overnment or olitical art to


obtain or retain business Prohibits payments to third parties when there isreason to believe it may be channeled to foreignofficials

Omnibus Trade and Competitiveness Act Allows for grease payments to cut red tape, suchas getting shipments trough customs, gettingpermits


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2006 Corruption Rankings

See Table 5-4



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Conflict ResolutionCountry Lawyers per

_________100,000 People

United States 290

Australia 242


United Kingdom 141France 80

Germany 79

Hungary 79

Japan 11

Korea 3


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Conflict Resolution

Litigation

Formal arbitration

Settles disputes outside of court


Groups agree to abide by panels decision

1958 United Nations Convention on the

Recognition and Enforcement of Foreign

Arbitral Awards (New York Convention) Most important treaty regarding international

arbitration signed by 107 countries


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The Regulatory Environment Agencies, both governmental and

non-governmental, that enforce lawsor set guidelines for conducting


Marketing activities affected byinternational and regional economicorganizations

EU

WTO


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Looking Ahead to Chapter 6

Global information systems and

market research



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Chapter 6Global Management Information

ys ems an

Marketing Research


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Introduction Understand the importance of information

technology and marketing informationsystems


scanning and opportunity identification Understand the formal market research

process

Know how to manage the marketinginformation collection system and marketresearch effort


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Information Technology for Global

Marketing

Information technologyrefers to an

organizations processes for creating,


storing, exchanging, using, and managinginformation.

Management information systems provide

managers and other decision-makers witha continuous flow of information about

company operations.


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Tools of MIS

Intranet Electronic Data Interchange (EDI)


(ECR)

Electronic point of sale


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Intranet

A private network

Allows authorized company

ersonnel or outsiders to share


information electronically 24-hour nerve center

Allows companies like Amazon.comand Dell to operate as real-time

enterprises


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Electronic Data Interchange

Allows business units to

Submit orders

Issue invoices


Conduct business electronically Transaction formats are universal

Allows computers from differentcompanies to speak the same

language


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Efficient Consumer Response (ECR) A joint initiative by members of a

supply chain to work towardimproving and optimizing aspects of


This is in addition to EDI

An effort for retailers and vendors to

work closely on stock replenishment Utilizes electronic point of sale (EDI)


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Customer RelationshipManagement

New business model Philosophy that values two-way

communication between company and


cus omer

Every point of contact with a consumer isan opportunity to collect data

Can make employees more productiveand enhance corporate profitability


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Customer RelationshipManagement

The major thing is, One size fits all is

not true. CRM is desi ned to su ort the


sales process, and if I develop a systemthat works in the United States, it might

not work in Europe.

Jim Dickie, Insight Technology

Group


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Privacy

Safe Harbor Agreement establishes

principles for privacy protection forcompanies that transfer data to the United

States from Euro e


Purposes of the information collected and used An opt out option to prevent disclosure of

personal information

Can only transfer information to third parties thatare in compliance with Safe Harbor

Individuals must have access to information


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Data Warehouses

Help fine-tune product assortments

for multi le locations


Enhance the ability of managementto respond to changing business

conditions


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Formal Market Research

Global marketing research is the

ro ect-s ecific s stematic atherin


of data in the search scanning modeon a global basis

Challenge is to recognize and respond

to national differences that influence theway information is obtained


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Step 1: Identifying the InformationRequirement

What information do I need? Existing marketscustomer needs already being served by

one or more companies; information may be readilyavailable


Potential markets Latent marketan undiscovered market; demand would

be there if product was there

Incipient marketmarket will emerge as macroenvironmental trends continue

Why do I need this information?


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Step 2: Problem Definition and Overcoming

the SRC

Self-reference criterion occurs when a persons values and

beliefs intrude on the assessment of a foreign culture


Enhances managements willingness to conduct marketresearch

Ensures that research design has minimal home-country

bias

Increases managements receptiveness to findings


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Step 3: Choose a Unit of Analysis

Will the market be Global


A country

A province

A state A city


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Step 4: Examine Data Availability

Sources may be

Company records

Secondary sources


Trade journals

Government sources such as CIA World

Factbook, Statistical Yearbook of the United

Nations, World Bank

Commercial sources such asThe Economistand Financial Times, Marketresearch.com


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Step 5: Assess Value of Research

What is the information worth versus

what it will cost to collect?


What will it cost if the data are notcollected?

What will the company gain with thisinformation?


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Step 6: Research DesignData Collection

Use multiple indicators Develop customized indicators specific to the


, ,

Do not assess a market in isolation

Observation of purchasing patterns/ behavior

is more important than reports of purchase

intention or price sensitivity


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Step 6: Research DesignResearch

Methodologies

Primary data collection methods


Interviews Consumer panels

Observation

Focus groups


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Special Considerations for Surveys

Benefits Data collection from a large sample

Both quantitative and qualitative data possible


an e se -a m n s ere

Issues Subjects may not want to answer or intentionally

give inaccurate response

Translation may be difficult Use back and parallel translations to ensure accuracy

and validity


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Research Methodologies

Personal interviews Consumer panels

NielsenTV viewin


Observation Using people or

cameras

Focus groups


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Sampling

A sample is a selected subset of a

o ulation that is re resentative of


the entire population. Probability samples

Non-probability samples


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Step 7: Analyzing Data

Clean the data

Tabulate the data


us ng s a s ca

techniquesANOVA,regression, factor

analysis, cluster

analysis Perceptual mapping,

conjoint analysis


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Presenting the Findings

Report must clearly address problem

identified in Ste 1


Include a memo or executivesummary of the key findings along

with main report


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Enhancing Comparability of Data Emic analysis

Ethnographic innature

Etic analysis

From the outside Detached

perspective that is


from within Uses cultures own

meanings and

values

used in multi-country studies

Enhancescomparability butminimizesprecision


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Looking Ahead to Chapter 7

Segmentation, targeting, and

ositionin


HAVE A NICE DAY!


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Thank You

shaping success in business and finance

LECT 3 - Political %26 Legal Environments %2B MIS %2B Marketing Research

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Transcript of LECT 3 - Political %26 Legal Environments %2B MIS %2B Marketing Research